A Strange, and Possibly Terrible, Case Against Health-Care Reform

It's a bit hard to know where to start with the Wall Street Journal's long argument against health care reform. Our health care system, they argue, is worth the money we pay for it. It is a dazzling achievement, ensuring not only longer lives, but better lives. The problem with the Obama administration's health care plans? They want to extend those benefits to those who can't currently afford them.

Reform would be perfectly acceptable if it was "merely trying to defossilize Medicare and save the federal fisc," says the Journal. The problem comes elsewhere: The attempt to "pass the largest entitlement expansion since 1965."

This, the Journal argues, will prove unaffordable. It will make our health care system too expensive. This country -- the richest on earth -- cannot foot the bill for universal health care. But that, of course, is untrue. Even a high cost estimate -- $120 billion in 2010, say -- is not that large in the scheme of the federal treasury. It's not much larger, for instance, than the outlays directed towards the Iraq War, which the Journal enthusiastically supported. It's certainly nothing that can't be raised with the imposition of some new taxes, as the seventh graph on this page neatly shows.

Rather, the Journal is arguing that we should not spend that money on universal health care. It is an audacious argument. Elsewhere in the editorial, the Journal commends a study by David Cutler and Mark McClellan that found the benefits of lower infant mortality and advances in the treatment of heart attacks "have been sufficiently great that they alone are about equal to the entire cost increase for medical care over time."

The study itself can be found here. Here's a part that the Journal does not quote: "Only one truly new therapy—angioplasty with stent—was developed in this time period," write Cutler and McClellan in their section on heart attacks. "Rather, technological change is predominantly the extension of existing technologies to more patients."

In other words, the great gifts of our health system -- the very benefits upon which the Journal bases its claims -- come primarily from the extension of health services to more Americans. It comes, in other words, from the very part of health reform that the Journal opposes.

I can imagine an argument against health-care reform that runs something like this: Our health care-system is inefficient and ineffective. Funneling money into the coffers of hospitals will not sufficiently improve the health of the nation. Those dollars should go toward early childhood education or subsidies for fruits and vegetables, or, if you're a simple utilitarian, treatments for third-world malaria.

What is unimaginable to me is an argument that goes like this: Our health-care system is worth the expense. It makes the lives of those it touches better and longer. The price per person is worth it. But we should nevertheless refuse to pay it for the poor or the sick. It is like an early car enthusiast's case against the Model T.

Yet that is exactly what the Journal has argued.

Their fear, it seems, is that the expense of health care will foretell the nationalization of health care. "Almost all care will be rationed by politics," they warn. But what does that even mean? That society will decide the amount of money it wants to spend on health care and then choose how best to allocate those resources? And it's not even as if the Journal's editorial board is against deciding what is, and is not, worth taxpayer dollars in theory. They would simply prefer that such decisions were left to them.

Per the article, the answer to managing skyrocketing healthcare costs is to increase personal responsibility, ie the amount of money being paid out of pocket. Given that more and more people are uninsured or having to choose very bare bones policies, that greater than 50% of personal bankrupcies are due to medical expenses, this solution is already underway. Voila, overall health care spending goes down because ordinary folks can't afford to access healthcare anymore.
Sorry, but to me that's rationing.

What bugs me about writers like Ezra Klein is that he is so up in arms about other people cherry picking facts, when that is exactly what he does.
First, for example, he doesn't mention this part of the WSJ article.
"The research of MIT economist Amy Finkelstein suggests that roughly half of the real increase in U.S. health spending between 1950 and 1990 is due to Medicare and the spread of third-party, first-dollar insurance."
Second, his argument about comparing something to the Iraq war falls apart unless you think the Iraq war is going to last forever (medical spending will). Not to mention that 120 billion will be 200 billion in 10 years and so fourth.
Further, Mr. Klein completely misleads his readers when he states "In other words, the great gifts of our health system -- the very benefits upon which the Journal bases its claims -- come primarily from the extension of health services to more Americans."
First, that statement ONLY relates to heart attacks not any other type of problem in the study. It is in the section titled "Technology For Heart Attacks." Yet, Mr. Klein leads his readers to believe this is a statement about all health care. Does he really think we won't click on the link to check his facts?
What about innovation in care for low-birthweight babies? The article states "By 1990 there was a substantial armamentarium of medical technologies available to treat low-birthweight infants, ranging from special ventilators to artificial surfactant to speed the development of infant lungs." So in this case, technology development was the main factor in improving health benefits. Yet, Mr. Klein conveniently leaves out this fact that does not fit his pre-formed conclusion.
I am not saying that there doesn't need to be changes to the health care system to bring it to more people. There does. But Mr. Klein does the cause of health reform no good when he assumes no one will notice the gaping holes in his arguments--that no one will check HIS facts. Health care reform needs an advocate that does not ignore any facts that do not meet with his already formed conclusions.

What bugs me about writers like Ezra Klein is that he is so up in arms about other people cherry picking facts, when that is exactly what he does.

First, for example, he doesn't mention this part of the WSJ article.
"The research of MIT economist Amy Finkelstein suggests that roughly half of the real increase in U.S. health spending between 1950 and 1990 is due to Medicare and the spread of third-party, first-dollar insurance."

Second, his argument about comparing something to the Iraq war falls apart unless you think the Iraq war is going to last forever (medical spending will). Not to mention that 120 billion will be 200 billion in 10 years and so fourth.
Further, Mr. Klein completely misleads his readers when he states "In other words, the great gifts of our health system -- the very benefits upon which the Journal bases its claims -- come primarily from the extension of health services to more Americans."

First, that statement ONLY relates to heart attacks not any other type of problem in the study. It is in the section titled "Technology For Heart Attacks." Yet, Mr. Klein leads his readers to believe this is a statement about all health care. Does he really think we won't click on the link to check his facts?

What about innovation in care for low-birthweight babies? The article states "By 1990 there was a substantial armamentarium of medical technologies available to treat low-birthweight infants, ranging from special ventilators to artificial surfactant to speed the development of infant lungs." So in this case, technology development was the main factor in improving health benefits. Yet, Mr. Klein conveniently leaves out this fact that does not fit his pre-formed conclusion.

I am not saying that there doesn't need to be changes to the health care system to bring it to more people. There does. But Mr. Klein does the cause of health reform no good when he assumes no one will notice the gaping holes in his arguments--that no one will check HIS facts. Health care reform needs an advocate that does not ignore any facts that do not meet with his already formed conclusions.

It's not rationing when you're allowed to pay for it. In a single payer system only the Government is allowed to pay for health care services thus the term "single" payer.

If the problem is the cost of payment then reform should focus on the pricing mechanism for health care. Why does it cost so much? Why is one night in a hospital bed $10,000? Who comes up with these numbers? It's not insurance companies. They're the ones paying it and that cost pressure is what has increased premiums so drastically. So reform should focus on the cost problem. If only the politicos could figure out a way to leverage market forces whle increasing their own power to disperse health care services then they'd be all set but the real problem is that there aren't any good solutions that increase political power.

I guess I'd better start developing some Kennedyesque connections or buy a really good dog costume so I can get health care at the veterenarian.

Rationing by ability to pay *is* rationing by politics, unless you think that CEOs earn every penny of their salaries and that all the financial industry's lobbying on the bankruptcy bill produced no effect whatsoever.

Insurance companies are very much to blame for the high price of healthcare. This is why an oxygen supply company will bill your insurance company $500 a month for an oxygen concentrator rental, and bill Medicare $148 a month for the exact same service. Hell, thanks to insurance shenanigans it cost 2 grand to paint a car these days. There are no rules to follow. When the insurance company has had enough they will just stick it right back to you.

3) Insurers benefit enromously from opaque billing systems. If they can avoid getting stuck with the bill, they will dump on the patient of provider by claiming some little loophole in their particular policy of the moment. They have no incentive for transparency in medical billing. If a provider or patient makes an error, then it benefits the insurer's bottom line.

4) The health insurance market has no control over adopting new technology and drugs that are efficacious instead of marketable. Hence, we have all these new devices and drugs that provide marginal(if any) improvement over existing technology yet we all have to pay for this expensive medical junk through our always rising insurance premiums.

5)The insurance market has no problem with ever increasing health care costs because insurers make more money in an expanding market. If our premiums go to $30,000 per family they're still getting a fat cut.

I could go on and on.

But clearly we have market failure in health insurance because the insurance competition isn't providing any medical value(except to insurance CEOs and shareholders). We must have competition that increases value.

For all the above reasons, no European country(or Japan) is stupid enough to allow the health insurance market to dominate the health care market like in the US. That's why they've controlled costs and we haven't. As much as I don't like it, only the government can remedy these incentive problems.

We need medical markets, not health insurance markets. Too bad the WSJ cannot tell the difference between the two.

The Wall Street Journal's conclusion is inevitably to be suspicious of anything that involves the government helping people. The conclusion is reached before the arguments are selected, which is why the arguments seem so weak.

I wonder about the framing of health care as an "entitlement program" or even as a "right" for that matter.

The role of doctors in public life strikes me as something more akin to a kind of public service (albeit one that requires years of training and in most cases great compensation after finishing a residency).

Are firefighters and police officers part of a public "entitlement program"?

Do we even look at those services in that light?

They serve a public function; however, they don't need too.

In theory we could privatize these services as the ancient Romans did and leave the onus on private citizens rather than view the services as some kind of collective responsibility. It would be inefficient, and it would produce a number of secondary costs, but it would be consistent with the way that we approach public health.

I'd like to see the WSJ editors confronted with that story in the Times a few months ago about the family in TX - both parents laid off from their jobs and they have a 20 year old son who has metastasized cancer, health problems of their own and they cannot afford the COBRA to keep health insurance. What would the WSJ editors think should happen to those people? They're trying to hold onto their house; should they just lose it and be poor and then maybe some government program will cover them? I wonder how they keep going.